Personal finance: No need to baby an electric vehicle
The average U.S. household has two cars. A multi-car household seems to be even more prevalent among EV owners.
The transition to a world of electric vehicles has officially shifted into higher gear. In January, General Motors announced a goal that by 2035 only electric cars and trucks would roll off its assembly lines. China is on record telling its automakers it expects 40% of new car sales in 2030 to be EVs.
Even if you’re not motivated by climate change concerns, EVs are about to become the better financial deal.
As early as 2023 it is expected that the cost to manufacture battery packs for EVs will finally be low enough that the sticker price to buy an EV will be on par with the sticker price of a similar model gas-guzzler. Given the ongoing maintenance and operation for EVs is dramatically cheaper, we’re only a few years away from a world where the cost to buy and operate an EV will be a far better financial deal than sticking with a combustion engine car.
Trophy car or war-horse?
Yet a study from the National Bureau of Economic Research finds some perplexing behavior among EV owners in California: They put half the annual miles on an EV compared to the average annual mileage for a gas-powered car. (California is home to about half the EVs driven in the United States.)
Extrapolating data from electrical usage at home before and after buying an EV (tracked via DMV registrations), the researchers were able to estimate how often EVs are being charged, and convert that data into an estimate of total miles driven. They estimate the average EV in California logged about 5,300 miles a year. The national annual average for a one-car household is more than 11,000 miles.
The research didn’t delve into why EVs put on less mileage. There’s the possibility that EV owners have found a way to navigate their world without being in the car so much.
But there is also some evidence that households could be babying their EVs. The average U.S. household has two cars. A multi-car household seems to be even more prevalent among EV owners. A survey by CleanTechnica a few years ago reported that more than 40% of EV owners in North America are in a two-car household and 20% have three cars.
Perhaps EVs are relegated to short hauls, and a household’s major miles are reserved for the gas-guzzler. If you do happen to care about climate warming, that isn’t optimizing your potential impact. And it’s more expensive. Consumer Reports estimates that holding miles-driven constant, it costs $800 less per year to operate an EV compared to a gas-powered sedan. The fuel savings for an electric SUV is about $1,200 per year.
Don’t worry about the EV battery
New EVs likely deliver plenty of juice on one charge to handle most daily commutes. CleanTechnica reports that the median per-charge range for 2021 EVs is more than 250 miles.
Still, consumers mistakenly assume an EV battery will behave like a smartphone and quickly lose its ability to maintain a charge. In a 2019 study by Cox Automotive, consumers said they thought an EV battery would last an average of about five years or 65,000 miles. In fact, an analysis of 6,000 EVs on the road finds that the average battery is still at 85% of its charge capacity after six years on the road. (You can check out average battery degradation for specific models at the free Geotab tool.) Interestingly, the Geotab analysis did not find that EV cars that ran up heavy mileage suffered worse battery degradation.
And keep in mind that every new EV sold comes with a generous standard battery warranty that is typically around eight years or 100,000 miles.
If you’re angling for your next car to be an EV, some shopping and usage considerations:
- Understand what the battery warranty covers. Some manufacturers will only replace a battery pack if it fails completely. Others vow to pop in a new battery if its charging capacity falls below a certain level — say 60% or 70% — during the warranty period.
- Consider weather impact. The Geotab analysis of more than 6,000 EV cars on the road found that between 50 F and 90 F the driving range for a battery is not impacted. But once you get below 32 F the battery’s range typically falls to below 80% of normal. So, for example, if you would have a 250-mile range in mild weather, in cold weather the range for one charge might fall below 200. And if you’re in Arizona or other summer swelter regions, Geotab estimates that once the temperature edges above 100 F you would likely see the range fall by at least 20%.
- Charge smart. This is where you really want to read the owner’s manual to help extend the charging capacity of the battery. As a general rule, if you’re not setting out on a long haul, it’s best to charge only to 80% or so of capacity, and recharge before you get below 20% capacity. And slow down: The fast-charge option will degrade your battery faster than if you patiently recharge at the normal setting.
Rate.com/research/news covers the worlds of personal finance and residential real estate. Carla Fried is a freelance personal finance columnist. Distributed by Tribune News Service. ©2020 Rate.com News. Distributed by Tribune Content Agency, LLC.